A SFO is a fund company wholly owned or controlled by members of a single wealthy family, established to exclusively manage the family's assets, investments and long-term interests of the family.

SFO operates exclusively for the benefit of its own family beneficiaries and does not act as an intermediary for external parties. Structurally, it functions similar to an investment company engaging in proprietary trading to invest for the family’s benefit. As such, it falls within the definition of a specified person under Schedule 3 of the Capital Markets and Services Act 2007 (“CMSA”) and is exempted from licensing requirements. However, the Securities Commission Malaysia (“SC”) is empowered to impose terms and conditions on a specified person i.e. SFO pursuant to section 58(3) of the CMSA.

The SFO Incentive Scheme, spearheaded by the SC for the Ministry of Finance (MOF), aims to position Malaysia as a premier wealth management hub for family offices.

The main incentive under this scheme is a 0% concessionary tax rate, available for up to 20 years, accorded to the Single Family Office Vehicle (“SFOV”), which applies to all income, including capital gains and foreign-sourced income.

Complementing this, the scheme also offers a one-off exemption for Capital Gains Tax (CGT) and Stamp Duty on the transfer of qualifying assets into the SFOV as part of its establishment.

This measure provides further assurance to applicants that distributions in the form of dividends to family members at the individual level will be exempted from tax.

To further enhance Malaysia’s attractiveness and ease of doing business, the Government has introduced a dedicated Fast-Track Residence Pass–Talent (RPT) visa for families and professionals under the SFO Scheme.

This visa provides long-term residency of up to 10+10 years for family principals, dependents, and key employees such as investment professionals or advisors associated with the family office. The RPT offers flexibility in employment, study, and business establishment within Malaysia, ensuring seamless relocation and continuity for multi-generational families.

Importantly, the RPT visa also extends to family office advisors or specialists whom families wish to bring into Malaysia, reflecting the government’s recognition of the need for global expertise in wealth and investment management.

Taken together, the tax incentives and dedicated visa facilitation provide a comprehensive ecosystem for families seeking to establish long-term roots in Malaysia. These measures are designed to attract global and Malaysian families alike, spur local investments, create skilled employment, and reinforce Malaysia’s position as a trusted hub for wealth management and family office activity.

The journey under the SFO Incentive Scheme begins with a consultation with the SC with a view to establish the family office where applicants are encouraged to prepare and present the business plan and ownership structure during the consultation session.

Upon consultation with the SC or in parallel, applicants can establish the family office where applicants must meet key requirements, including setting up two local entities, should be opening a bank accounts (non-retail account) with a licensed institution in Malaysia, and preparing all necessary documentation.
More details on SFO Consultation & Establishment.

Once established, the family office can proceed with securing conditional approval from the SC where the structure, assets, and operations of the SFOV are reviewed. Upon securing conditional approval, applicants may complete operationalisation of their family office.
More details on SFO Conditional Approval. 

At the end of each financial year, the SFOV shall submit audited financial statements with the necessary documentation and apply for annual tax certification to ensure continued compliance with the scheme's requirements and eligibility for the 0% concessionary tax rate.